Tuesday, May 31, 2011

Atlanta's Move to Winnipeg: The Good Side

by NiNY

This is a story about accepting that the water under the bridge is, in fact, under the bridge.

For any of the myriad reasons already floated, the NHL in Atlanta was not going to work. My colleague KiPA points out that it was the owners and league that doomed the Thrashers, not the fans - and I agree with him. But, regardless the reason, the team failed in Atlanta. You can throw a bunch of maybes out there. Maybe with different owners it would have been better. Maybe with a better lease situation it would have been better. Maybe, maybe, maybe. But the facts on the ground were not conducive to that franchise thriving in Atlanta.

So, fish or cut bait.

The NHL cut bait.

Bettman talked about 'righting a wrong' in his comments about the Thrashers moving to Winnipeg (technically pending the board of governors' vote, which I have to think will be a rubber stamp affair - surely the best ownership options were already floated in Atlanta and, barring a new ownership option emerging, there's nothing at all in the way of an 'aye' vote). And that's interesting because he was basically echoing the comments he made at center ice of the Xcel Energy Center before the Minnesota Wild's inaugural season home opener. "We never should have left" or words to that effect.

Whether the NHL, under Bettman, is a stronger NHL than it was before Bettman is an argument for a different day (maybe a future HTP Good Side/Bad Side?) But if Bettman and the league realize that, at some point, you can't get blood from a particular stone and move on - and at the same time find a market they think will be more viable than the one they're leaving (and that's all they have right now: a prediction) then that's okay with me.

This is also a story about economics.

Having already invoked the North Stars, right up front, the situations are a bit different. The North Stars were moved by their owner, seeking a better deal for himself. The Jets, unable to keep up in the pre-cost-certainty NHL, and completely unaided by the Canadian dollar, were unable to afford to stay. The Wild came to St. Paul as an expansion franchise, while the Thrashers are a relo. The Canadian dollar is much stronger vs. the US dollar now. I would wonder if the Jets would have survived before in a post-lockout NHL featuring cost certainty, but I wouldn't want to get started on the maybes. I'm sure it hurt both fanbases equally when the North Stars and Jets left, but there are slightly different economics.

And economics is key here.

The Thrashers played to an average of 13,469 this season, or 72.6% capacity. The MTS Centre in Winnipeg seats 15,015. 13,469 is 89.7% of 15,015. So Winnipeg need only fill its building to at least 90% of capacity to immediately make sense from the NHL's perspective. Even beyond the initial honeymoon period, this should be easy to accomplish particularly given the parity in the league (again, back to the provisions of the cost-certainty that the league won during the lockout) and the fans' painful memory of losing a team once already.

Economically, corporate sponsorship is a concern for long-term viability. I'd say that's the one material issue to be overcome. I'm reading that they might name the team the Manitoba (something) instead of the Winnipeg (something) to appeal to a broader potential sponsorship base. So, while this is still absolutely an outstanding issue to be watched, it appears as though the pertinent parties are sensitive to it which is a step in the right direction.

But the main thing when looking at this from an economics standpoint is to compare what the NHL has in Winnipeg/Manitoba to what it is leaving behind in Atlanta. The comparison would be at least as favorable to Winnipeg if it was Phoenix that was moving, but the math works when it's Atlanta just the same.

If you believe that the long-term economics in Atlanta with the current set of circumstances just didn't work, then you also have to believe the long-term economics in Winnipeg are at least as bad in order to think this is a bad move for the NHL. And, to me, that dog just don't hunt.

The NHL was staring at a failure. And a two-time loser at that. If it was going to relo a team, it had to be to a place that would go bananas to get one. Winnipeg is as good an option as there is, and you get a little extra heart string tug given their history vis-a-vis the NHL.

So, the economics are solid and the NHL took the opportunity to accept its failures and move on. It has a built-in audience in Winnipeg and one that is extra-motivated to make it work long-term.

Hey, if nothing else, Selanne's a UFA. Maybe he'll want to *finish* his career back where it all began...

Currently the loony is nice and stable against the dollar, but back in ‘96 $1 USD was worth about $1.40 CAD. It presented a big problem for Canadian teams who collected revenue from ticket sales, TV deals, merchandise, etc. in Canadian dollars but had to pay their players salaries in American dollars and it’s one of the main factors that sent the Jets down to Phoenix in the first place. Things are favorable now, but there’s no telling what the future will hold and if the loony dips again small Canadian markets (i.e. Winnipeg and Quebec City) will again, like they were 15-20 years ago, just not have any potential for profitability whatsoever

Really interesting post! The NHL remains an integral part of the process, but until Winnipeg and Atlanta reach an agreement for the sale and purchase of the Thrashers, there is no reason for the league to intervene other than to continue to do what it can to secure local ownership to keep the team in Atlanta. Thanks for sharing this.

POI

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Nick in New York (NiNY) is just a guy with a computer and a love of hockey. And a wife and two daughters whom he adores. And a decreasing ability to metabolize beer in a way that doesn't, er, add to the bottom line, as it were.

Feel free to toss him an email with any thoughts on the blog, or the sport.

Mason...you don't really want to mess with Mason. He's nasty with the writing skillz. And can drop some ridic culture pulls into his narrative. Lover of haiku.

Mason can be reached at: jaredmas@gmail.com

Did you know that no two zebras' stripes are the same? Well we have a zebra here at HTP, and his name is Doubles. Only he's a hockey zebra - and he's here going to share his great wealth of hockey knowledge from an on-ice official's standpoint with you. Feel free to read him in Chris Rock's voice.